Taking On Partners to help with the responsibility and funding
Let's talk about taking on partners, though in this sense we'll be looking at it from the perspective of you needing someone who is primarily a financial partner, and not necessarily someone who you look to in the day to day operations of the business.
There is a difference, obviously, and as anytime you take on a partner in some endeavor, you need to have your roles and responsibilities clearly delineated.
Failing this, you'll soon find yourself partner-less, and your business may be without working capital.
The first thing you need to do when looking for a financial partnership is to determine your roles.
Most likely you'll want the financial partner to be the source of your startup funds.
You need to be clear about what you expect from this relationship from the get-go, especially if you don't want to awaken one day to a slate of demands and changes for everything in your business.
The other party may have certain talents they can bring to the table, and you'll need to decide if it is worth it to you to have them become more than a financial partner.
You need to lay out exactly when and how the partner gets repaid for capital invested, and what their profit participation is.
You need to also clearly state what input they have in the business, and have an agreement about the type of business you are conducting.
(In other words, don't tell them you're starting a church and then start a dating service!)
Put this all down in writing, and have an ending date for the partnership, unless you want this to be more than a financial arrangement.
It doesn't only have to be one partner, either. Many times a group of loosely knit investors form investment clubs and these can be good sources of startup capital, providing you follow the guidelines mentioned above.
You can get larger amounts of startup money this way, and it is not that much more difficult.
If you take on groups as partners, however, it's best not to have them involved in anything other than the money, as this will cause innumerable headaches if there are too many cooks stirring the pot!
Partnerships have long been a good source of startup capital, and that is still true today.
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Grants - Government Funding For Eligible Businesses
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